Elgi Eqi­up­ments pants to be No.2 in world air com­pres­sor mar­ket

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The world air com­pres­sor mar­ket is grow­ing steadily year on year. As the mar­ket size is an­tic­i­pated to be USD 20 bil­lion in 2023, with 3.6% CAGR, Elgi Equip­ments, one of In­dia’s lead­ing air-com­pres­sor man­u­fac­tur­ers, plans to be­come World No.2 in the global mar­ket by 2027.

The com­pany has opted to take the in­no­va­tion route to be World Num­ber 2 in the global air com­pres­sor mar­ket by mak­ing the prod­ucts en­ergy ef­fi­cient, oil free and with in­creased up­time re­li­a­bil­ity. Elgi air com­pres­sors are more power-ef­fi­cient than the com­pet­ing prod­ucts in the over­seas mar­kets. Elgi has al­ways fo­cused on strength­en­ing its at­ten­tion on in­dige­nous tech­nol­ogy, re­search and de­vel­op­ment to in­no­vate newer tech­nolo­gies in the air com­pres­sor in­dus­try.

“Elgi as a brand that is over 50+ years, has con­stantly evolved as a global leader in pro­vid­ing com­plete range of com­pressed air so­lu­tions leav­ing be­hind sat­is­fied cus­tomers across all in­dus­trial ver­ti­cals. Air-Com­pres­sors are the “life source of all in­dus­tries” and the need will never di­min­ish. With our best-in-class life­cy­cle cost driven by low spe­cific power con­sump­tion and main­te­nance cost, we strive to run all man­u­fac­tur­ing fa­cil­i­ties across the world with Elgi com­pres­sors,” Jairam Varadaraj, Man­ag­ing Di­rec­tor, Elgi Equip­ments said.

The plan of Elgi Equip­ments to be­come the num­ber 2 in the global air com­pres­sor mar­ket in 10 years is to be car­ried out also through in­or­ganic growth. “We as­pire to be­come the num­ber 2 firm in the global air com­pres­sor mar­ket by 2027 by ac­quir­ing over­seas dis­trib­u­tors and set­ting up assem­bly lines in the US to in­crease our mar­ket share,” Varadaraj said.

“Our ac­qui­si­tions will be in de­vel­oped mar­kets like the US and Europe. We are look­ing at ac­quir­ing ex­ist­ing dis­trib­u­tors in those mar­kets,” he said. Elgi has iden­ti­fied about 25 dis­trib­u­tors in the US and Europe and has set aside Rs 5,000 crore for this. He said the com­pany will set up an assem­bly line in the US once the sales vol­umes there touch 1,000 units per year. At the end of the 10th year, Elgi Equip­ments’ wish is to move from the present 7th slot to 2nd slot. Varadaraj hopes that 70% of growth would come from ac­quired busi­ness and 30% through or­ganic growth.

The air com­pres­sor mar­ket glob­ally is es­ti­mated to be worth about $15 bil­lion and in In­dia it is $600 mil­lion. Last year, Elgi posted a turnover of $230 mil­lion, with 90% from com­pres­sor busi­ness. Al­most 50% of the rev­enue is from ex­ports. In 5 years the com­pany aims to in­crease its rev­enue to $1 bil­lion. For this it might in­vest around Rs 1200 crore over the next 3 years to beef up its in­fra­struc­ture.

“In the last 8 years, we have posted a cu­mu­la­tive an­nual growth rate of 14.3% against the in­dus­try growth rate of 2.5-3%. If we have to achieve the as­pi­ra­tional level, we have to clock CAGR of 28%. It is not go­ing to come through or­ganic growth. We have to achieve this through in­or­ganic growth too. We have the prod­uct, process, peo­ple and tech­nol­ogy to achieve this,” he said.

The com­pany has also un­veiled the new brand iden­tity with a new logo and colour scheme for its en­tire prod­uct range. Red and Black are more dis­tinct and dy­namic than or­ange and grey. Red stands for per­for­mance, pas­sion and en­ergy. It re­flects the drive to con­stantly evolve and keep get­ting bet­ter. Black is clear, bold and helps es­tab­lish a dis­tinct brand world.

Jairam Varadaraj, Man­ag­ing Di­rec­tor, Elgi Equip­ments along with the newly launched EG 22 air com­pres­sor

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